CANTON, N.C. (From news reports) -- A leaked, undated internal memo from Evergreen Packaging's Canton General Manager John McCarthy says that the mill will idle one of its paper-making machines, citing reduced demand for its particular product.
"There has been a sharp downturn in the Uncoated Free Sheet (UFS) market due to reduced customer demand and an increase in UFS imports from other parts of the world," it reads. "As a result of this downturn, our recent UFS manufacturing output has exceeded our sales and our warehouses are now full of product with very little additional space available and no indication of change in market conditions for the foreseeable future. As such, the Company has decided to idle PM20 to more closely match our UFS production to customer demand."
The PM20 machine, built in 1960, produces fine writing and envelope-grade paper. According to a market report issued by Global Newswire in 2022, total domestic demand is projected to be 7.7 million metric tons in 2026, albeit at an annual growth rate of -1.2% from 2022 to 2026.
The report cites the healthcare sector as the largest consumer of UFS paper and blames the increasing cost of raw materials for the shrinking demand. The increase in paperless transactions is also a factor.
A source within Evergreen said that the machine has already been idled and that an official announcement may be made to the public soon.
Officially called a "curtailment," the idling of PM20 could be temporary and last only a few months. During that time, plant engineers will make upgrades and mechanical improvements to the machine, preserving its ability to be restarted.
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